Glossary

Warrant with Knock-Out

This type falls in the category of structured products with leverage.It can be of two types: call-knockout-warrant and put-knockout-warrant. The first one is based on expecting the rise of the underlying asset price, the second – on the fall of it. The purchase of this structured product gives the investor a chance to earn more than the underlying asset. This type has an embedded barrier (underlying asset price threshold); when it is reached, the product expires immediately at the zero price, i.e. the investor can lose everything.